Tuesday, August 11, 2015

The Left's Fight-for-$15 Scam

The current feel-good push for a $15 an hour minimum wage has nothing to do with helping workers and everything to do with advancing the goals of the left wing, especially the labor movement.

This is true despite the occasionally soaring rhetoric of President Obama amid the Left's incessant whining about "income inequality," itself a particularly un-American concept, an imaginary evil that dwells only in the nightmares of left-wingers. The fact gets lost that the minimum wage itself and continuing increases in the minimum wage hurt working people. Period. And as economist Thomas Sowell has pointed out, minimum wage laws themselves have an inglorious history, having been used to price minorities out of labor markets. If a racist business owner has a choice between a person whose race he likes and someone whose race he doesn't like and their services cost the same, take a guess whom he'll pick.

Raising the hourly minimum wage, whether to a job-killing $15 or a higher dollar figure, isn't intended to aid those who are financially struggling. It's not compassionate; in fact it's the opposite. It doesn't help the poor. It's a left-wing vote-buying scam that moves money around on an Alinskyite chess board. Democrats desperately want to recapture the House and Senate so they can impose even more destructive progressive policies on the populace. They use the minimum wage, which has become a "motherhood" issue for the Left in recent years. It gets bleeding-heart voters to the polls the way that opposition to same-sex marriage used to get conservative voters to the polls.

Hiking required hourly pay is about redistributing wealth to fat-cat labor unions and recruiting Democratic voters. It allows the gluttonous Left to gorge itself on other people's money.

No serious economist doubts that raising the minimum wage eliminates jobs from the workforce. How it does this is not rocket science.

Workers whose skills aren't worth $15 an hour to employers, teenagers for example, won't get hired. Summer jobs and part-time jobs for students evaporate which makes young scholars more dependent on student loan programs. Businesses like fast food purveyors don't want to be forced out of business. Justifiably insistent on preserving their profitability, they fire employees and install specialized robots and touch-screen ordering systems. Major restaurant chains and gas station-convenience stores are already doing this.

Some of the newly unemployed people end up on welfare which helps to expand the size and scope of government. People who are dependent on the government tend to support Democrats. It's a big win-win for the Left no matter how you look at it.

New York's loud left-wing demagogue of a governor, the relentlessly strident Andrew Cuomo (D), wants to impose the $15 an hour wage mandate on a specific industry without bothering to consult the state legislature in Albany because he knows such a move is a crowd pleaser. A panel of lapdogs appointed by Cuomo gave him political cover by recommending last week that the minimum wage be raised to $15 for all fast-food restaurant chains of a certain size in New York State.

"When New York acts, the rest of the states follow," said Cuomo, an increasingly authoritarian tax-and-spender who has presided over the Empire State's dramatic, long-running hemorrhaging of jobs to states with more sensible policies. "We've always been different, always been first, always been the most progressive."

Left-wing groups and labor front groups like New York's ACORN-affiliated Working Families Party love the idea. WFP director Bill Lipton hailed his state's upcoming policy change, calling it a victory for the "99-percenters." The leftist shill added, "There's clearly a new standard for the minimum wage, and it's actually a living wage for the first time in many, many decades." To so-called progressives like Lipton, the much-abused words fairness and equality are weapons used to triumph over common sense and attack the capitalist system.

The "Fight for $15" contagion and the sanctimony that comes with it are spreading across the fruited plain.

In recent days the University of California followed this budding national trend, announcing it was raising its own system-wide hourly minimum wage to $15. The mandated hourly wage was recently raised to $15 in big Democrat-controlled cities like Seattle, San Francisco, and Los Angeles. The same wage hike is under consideration in Washington, D.C., where the minimum wage was raised from $9.50 to $10.50 on July 1.

The "Fight for $15" movement got a massive shot in the arm in the fall of 2013 when the voters of SeaTac, a small community outside of Seattle that is home to the Seattle-Tacoma International Airport, just barely approved the $15 an hour wage mandate in a referendum. The Yes vote was 3,040 (50.64 percent) compared to the No vote which was 2,963 (49.36 percent). This razor-thin victory gave labor and community organizers across the country a huge morale boost and drove bands of economic illiterates to push even harder for their goal.

Mark J. Perry, a professor of economics at the University of Michigan's campus in Flint, the home of small-c communist movie maker Michael Moore, reports that the $15 hour minimum that appropriately took effect this past April Fool's Day in Seattle is already claiming victims.

The wage law, which Perry dubs the "government-mandated wage floor that guarantees reduced employment opportunities for many workers," began a few months ago with an increase of the $9.47 an hour minimum to $11 an hour. The minimum rises to $15 by 2022. With the astounding 16.2 percent jump from $9.47 to $11 in April in a rocky economy, the city council congratulated itself on its fine work on its website.

This policy makes "Seattle the first major city in America to take such an action to address income inequality." It is also an "economic death wish," he writes. Perry adds caustically,

That reminds [me] of something I read recently to the effect that liberals have hearts that bleed so profusely that it often prevents oxygen from getting to their brains and results in extreme lightheadedness, and cloudy and defective decision-making.

Perry cites another article from the Washington Policy Center that reports that just before the law took effect the Emerald City's dining-out economy was contracting in anticipation of the law as the city "experienc[ed] a rising trend in restaurant closures."

The shut-downs have idled dozens of low-wage workers, the very people advocates say the wage law is supposed to help. Instead of delivering the promised “living wage” of $15 an hour, economic realities created by the new law have dropped the hourly wage for these workers to zero.

Advocates of a high minimum wage said businesses would simply pay the mandated wage out of profits, raising earnings for workers. Restaurants operate on thin margins, though, with average profits of 4% or less, and the business is highly competitive.

The $15 hour wage mandate is economically suicidal, the think tank paper continues, explaining how economics works in the real world, as opposed to inside the minds of social justice warriors.

When prices rise consumers seek alternatives, a behavior economists call the “substitution effect,” which results in lower demand for the higher-priced product. In the case of restaurants, consumers have access to the ultimate substitution – they can stay home.

Fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy. People probably won’t notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.

Perry also cites a Seattle Magazine item with the self-explanatory headline, "Why Are So Many Seattle Restaurants Closing Lately?" Restaurateurs tend not to be members of the hated "1 percent." A restaurant lobbyist notes that an eatery that pulls in $700,000 a year can yield a meager $28,000 a year in profit for its owners.

But again, the Left is only concerned with intentions, not results. Stoking the raging flames of class warfare by flogging a minimum wage hike helps the Left in several specific ways.

Raising the minimum wage benefits President Obama's comrades in organized labor. It helps the cartels also known as unions by restricting competition among those offering their labor. It also helps unions because many collective bargaining agreements mandate automatic pay raises for those covered by the agreement when the minimum wage is increased.

It has long been an open question whether leftists fail to grasp basic economic principles or whether they understand economics but choose to ignore economic realities because such things stubbornly defy the left-wing narrative.

Conservative commentator Jonathan M. Hanen wrote about these defective progressive thought processes earlier this year. Left-wingers regard the economy as a living thing, or rather a plaything, that can easily be manipulated to serve social-justice ends.

He noted that Sen. Elizabeth Warren (D-Mass.) embarrassed herself on Capitol Hill two years ago when she posed a bizarre question about a weird abstraction to someone who actually understands economics.

Warren made headlines at a congressional hearing in 2013 by advocating tripling the minimum wage to a job-killing $22 per hour, well beyond Obama’s proposed hike from $7.75 to $9.00. Warren tried to sell her dubious proposal as “indexing the minimum wage.” She asked, presumably with a straight face, University of Massachusetts economics professor Arindrajit Dube, “If we started in 1960, and we said that, as productivity goes up—that is, as workers are producing more—then the minimum wage is going to go up the same. And, if that were the case, the minimum wage today would be about $22 an hour. So, my question, Mr. Dube, is what happened to the other $14.75?”

"If this question had been asked at a convention of economists," Hanen opined, "the laughter would have been deafening."

With that said, unfortunately, public opinion polls have shown for years that fairly large majorities have succumbed to the siren song of minimum wage hikes.

In some polls even self-identified Republicans and conservatives support increasing the hourly rate, albeit by bare majorities. People believe it doesn't cost them anything. They believe that the burden is borne entirely by well-heeled corporations, instead of by individual shareholders like themselves who have invested in, for example, mutual funds.

Some economic ignoramuses on the Left have even convinced themselves that when workers take a low-wage job that the business that hired them is effectively receiving a subsidy from taxpayers on the theory that the workers will have to avail themselves of social welfare programs in order to survive.

The Left sees any and all situations as opportunities to make government bigger.

The lure of raising the minimum wage, even at the expense of the workers they supposedly champion, is far too powerful for left-wingers to resist.

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About Me

An award-winning investigative journalist, Matthew Vadum is senior editor at Capital Research Center. His work is cited by Fox News, Weekly Standard, Wall Street Journal, USA Today, and many other media outlets. He's been on "The O'Reilly Factor," "CBS Evening News," "The Daily Show," and "The Colbert Report," and denounced by Al Sharpton, Oliver Stone, Roseanne Barr, and Keith Olbermann. Michelle Malkin hailed Vadum for having "the foresight and insight to report on the [ACORN] story when nobody else would." Glenn Beck said he finally "got it" when Vadum appeared on his Fox TV show to talk about ACORN, helping him draw one of his famous tree diagrams. Vadum "writes some of the harder edged and more influential briefings" in the conservative movement (Washington Post) and is a “conservative data hound" (Washington Independent).
Vadum is also Adjunct Scholar at the James Madison Institute. His report galvanized opposition to liberals' campaign to force a kind of affirmative action onto private grant-makers in Florida. According to National Review, it convinced the Florida legislature in 2010 to pass SB0998 which outlawed the "ACORNization" of philanthropy in that state.